Credit crunch slams California home prices, sales

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The sales rate of previously owned single-family homes fell 38.9 percent in September compared to the same month last year, while the median price declined 4.7 percent and the months' supply bloated to 16.6 months, the California Association of Realtors reported today. Colleen Badagliacco, association president, said in a statement that the year-over-year drop in median price -- the first in more than 10 years -- "was mainly the result of the credit or liquidity crunch, which also drove sales below the 300,000 mark." She also stated that California relies more heavily on jumbo loans, which are loans above a federally established conforming loan limit of $417,000, than many other states because home prices in the state typically exceed that amount. "This speaks to the need to raise...